In the rapidly evolving digital landscape, tax leaders are finding themselves at the crossroads of tradition and innovation. Here are three key considerations for tax leaders navigating the digital revolution.
Tax departments have access to more information than ever before. The challenge, however. lies in effectively harnessing this data.
Leveraging this data has benefits beyond compliance. It can lead to improved decision-making, risk management, and strategic planning. The sheer volume of data can be overwhelming, and tax leaders need to ensure their business invests in robust data management systems and analytical tools to make sense of this information and extract valuable real-time insights.
Data quality matters. It is important to understand your data requirements and existing quality challenges from a tax perspective. This will allow you to advocate for relevant data needs during wider enterprise resource planning (ERP) design discussions.
The advent of advanced technologies is transforming the way tax departments operate. Embracing advanced technology, however, requires a shift in mindset. It’s about viewing technology as an enabler, not a threat.
Robotic process automation (RPA) and artificial intelligence (AI) are at the forefront of this transformation. RPA automates repetitive and mundane tasks, bringing efficiency and accuracy and freeing up valuable time for tax professionals. AI enables predictive analytics, and automates routine tasks, allowing tax leaders to make informed decisions. By embracing these technologies, tax leaders can streamline operations to focus on strategic initiatives.
The digital revolution is not just about technology; it’s also about people. Tax departments need professionals who are well-versed in tax legislation and comfortable with technology. As tax processes become more automated and data-driven, the skills required in a tax department are changing. This requires a commitment from tax leaders to ongoing training and development of themselves and their teams.
As technology advances, so does the regulatory landscape. Governments worldwide are introducing new regulations to capture revenue from digital services. The OECD’s BEPS Pillar 2 initiative is a prime example, aiming to address tax challenges arising from digitalisation.
It is important to keep up to date with tax reforms worldwide. Gaining an early understanding of how these changes could impact your organisation will give you the time to determine how to leverage technology to ensure compliance and minimise risks.
The impact of technology on tax is profound and far-reaching. It’s transforming how tax departments operate, the skills they need, and the value they can deliver. By harnessing the power of data, navigating regulatory changes, and investing in skills and talent, tax leaders can turn digital disruption into a strategic advantage. The future of tax is here - if you would like to discuss what your business should do to prepare, please speak to Emily Li or your usual Evelyn Partners contact.
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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.
Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. You should always seek appropriate tax advice before making decisions. HMRC Tax Year 2023/24.
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